Private-Label vs White-Label: What's the Difference and Which is Better?

Are you interested in selling existing products but want your branding on them? That's what private-label and white-label products are all about. Both terms are used to describe putting a company's branding on a product made by someone else.

While private-label and white-label terms are often used interchangeably, they're not exactly the same. They follow a similar process and allow brand building for businesses, but the terminology slightly differs. So, what is the difference, and which one is better for you?

What's the difference between private-label and white-label products?

Private labeling and white labeling both involve putting your branding onto existing products. The main difference between the two is exclusivity.

Private labeling

The seller gets exclusive rights with private-label products. The manufacturer makes the products specifically for that seller and their business. Even though the seller didn't directly make the products, their branding will be on it, making it different than regular dropshipping products. Not sure on what's the difference here, read more about dropshipping vs private label.

Private labeling allows businesses to customize key product details such as design, packaging, ingredients, labeling, and specifications. This helps create unique offerings that align with their brand, resonate with target audiences, and stand out in the market.

In 2023, private-label products comprised about 21% of the consumer goods market volume. That percentage continuously increased slightly in the years leading up to that.

White labeling

With white-label products, multiple retailers sell the same product from a manufacturer. Each business can put its unique labels on the product, but the manufacturing process is the same for all of them. Usually, a white-label provider only allows label customization, not the product ingredient list.

In most cases, white labeling is easier for the white-label manufacturer. The setup process is faster, and the operation is more affordable since there's less work involved. It's an ideal way to put a custom label on dropshipping items.

Which one is better: private-label or white-label?

One isn't better than the other. Private labeling might be better for some businesses, while others find more benefits in white-label products. Consider the benefits and downsides of both options to determine which is the best route for you.

Products of these types have been around since the 19th century, and they've evolved and become more popular since then. White labeling and private labeling are successful options for products, so think about which one meets your needs better.

Pros of selling private-label products

Private-label business models offer numerous advantages that can make them an excellent choice for your business.

Greater differentiation from competitors

Since private-label product manufacturers sell each product exclusively to one business, you can feel confident that your product won’t be identical to any competitors. This exclusivity allows you to tailor your product’s unique features to appeal directly to your target market, giving you a competitive edge when advertising your offers.

Room for more customization

Private-label solutions offer greater customization for products compared to white-label options. While both can include custom labels, private-label products are exclusive to the business purchasing them. This exclusivity allows the seller to influence the private-label product's features, ensuring it aligns with their brand and audience.

You may not get as much customization as you would if you made the products yourself, but it's still a huge benefit that sets it apart from white labeling. For example, if you want a private-label coffee brand, you might be able to add unique ingredients or use sustainable packaging to help your products stand out.

Less responsibilities for the seller

A huge benefit that applies to both these business models is stress-free operations. Since someone else handles the making, storing, packing, and shipping of products, you don't have to worry about many responsibilities.

By having less on your to-do list, you can focus more time on other aspects of your online store. You can improve the product appearance and spend more time on marketing and customer service.

Cons of selling private-label products

While selling private-label products is a great route to take, it's not for everyone. Consider these downsides before starting a private-label business.

Can't have full control over product quality

While you get some say in the product details with the private-label model, you're still not the one making and handling the products. So, aspects like quality control is out of your hands. Each product is made and shipped out without you seeing what the product looks like.

To ensure that quality doesn't become a concern, only work with a third-party manufacturer you trust. Do lots of research about the supplier to ensure that others had a positive experience working with them.

Also, when interacting with manufacturers, don't be afraid to ask lots of questions, such as what their quality control practices are and how fast their shipping times are.

Even if you're not the one shipping out the products, you'll still be the one receiving feedback about it. So, you'll want to ensure your supplier is careful with creating and packaging products to maintain good customer satisfaction.

Finding a supplier can be difficult

Since you're putting so much trust into the supplier, it can take some time to find the perfect private-label manufacturer services. On top of that, private-label product suppliers are harder to find than white-label product suppliers.

White-label product manufacturers offer the same product to multiple retailers while private-label manufacturing businesses only supply one product to one retailer. Sometimes private-label product manufacturers can be more selective than people expect.

Since there are often lots of businesses wanting to work with a quality private-label product supplier, you need to be able to prove that your business is worth it and you also have the funds to cover manufacturing.

Not all product types work

If you're having someone else make and ship products for you, it's important to acknowledge that not every product is suitable for that process. Bulky products, dangerous items, and anything with copyright or legal issues should be avoided for private-label products.

Always check to make sure your product niche is suitable for private-label brands before using this method for your business.

Pros of selling white-label products

White-label products have some benefits that set them apart from other business types like private labeling. So, think about these positive aspects to decide if this is the best option.

Easy to get started

It's usually quicker and easier to get started with white labeling than private labeling. That's because a white-label product provider can supply the same products to multiple retailers. So, the manufacturer's likely already making and storing these products even before they start working with you.

Once you find a good supplier to work with, you'll have a product to sell right away. All you have to do is design your personalized branding to put on the packaging. There isn't a large upfront investment since there's no need for you to physically brand, store, and ship products yourself.

Even though it's easy getting started with white-label products, don't rush into it before you're ready. Make sure you're confident about the supplier you choose and take your time when setting up the perfect online store.

Offers some personalized branding

White-label service is a form of dropshipping, but it's better than other dropshipping business models because you can add some personalization. You can have your own brand information on the product labels, making generic products stand out from the competition.

For example, if someone is looking for a new skincare product, they'll likely lean toward the product with an eye-catching label as opposed to the one that's simple and generic. Even if the products are exactly the same otherwise, a strong brand identity can set your items apart.

Less responsibilities for the seller

As a white-label product seller, you'll have less to worry about than the average online store owner. Getting your business set up is quick and easy. Then, once it's operating, you only need to worry about the website and marketing aspects. There's no need to stress about handling your products since you have a supplier for that.

While some people like to have more control over the products, most people love white-label services because they allow sellers to more easily focus on other business needs.

You'll have more than enough time to improve your product pages and find ways to help your advertisements reach more people. Those aspects could further help your brand stand out from similar shops.

Cons of selling white-label products

Of course, white labeling is great in many contexts, but there are some challenges you may encounter. Think about the following to determine if the pros outweigh the cons.

Less customization

With white-label products, you can choose what appears on the product label, but there isn't much customization beyond that. Since the manufacturer is supplying the same product to multiple businesses, it's easiest if they keep the product details the same.

This means that your product will likely be exactly the same as a competitor. Yet, you can still make your own brand stand out by designing the labels in a way that makes your products more recognizable and interesting.

Product quality control is out of your hands

Like with private-label products, you're not in charge of quality control for white-label products. Someone else is making and shipping the products for you. While that definitely lifts some of the weight off your shoulders, it can make it difficult to know if products will meet customer expectations.

Find a white-label product manufacturer that you trust. Take your time when finding a supplier to ensure the one you choose fits all your needs.

With a reliable manufacturer, you won't need to worry about your products as much because you know they're in good hands.

Not all product types work

With white-label products, you need to choose items that are easy to ship without any customization. Like with private-label brands, you should avoid bulky products, dangerous items, and any products that could have copyright issues.

You might have a product niche in mind that isn't ideal for for a white-label or private-label item manufacturer, and that's okay. Determine what products you want to sell first and then make sure there's a company able and willing to make and ship those items.

Keep in mind that some products work well for white-label services, but selling them may be more complicated than the average product.

For example, white-label supplements are popular because they're in demand and easy to put a custom label on. Yet, they often have specific regulations for their labels and ingredients since they're consumable health products. Keep that in mind if you want to tackle a unique product niche like that.

Choosing between selling white-label vs private-label products

After considering all the above information, private-label products might sound better since you'd be selling something completely unique. While they're certainly better for many businesses, others find more success with white-label products.

The right fit for both approaches

Private-label and white-label options are excellent choices if you want to:

• Sell products online without handling manufacturing or shipping.
• Rebrand existing products to reflect your business identity.

Both approaches save you from the complexities of product creation, but each serves different goals.

Why private-label may be your winning business strategy

Choose private-label products if you:

• Prioritize control over product design and shipping processes.
• Want your brand to stand out with unique offerings.
• Are ready to invest extra time and money to find the ideal manufacturer or supplier.

Private-label products let you craft a distinct brand identity, ensuring your offerings stand apart from the competition.

Why white-label could be your perfect business starting point

Opt for white-label products if you:

• Are new to e-commerce and want a straightforward setup.
• Need to launch your business quickly.
• Don’t mind selling generic products branded as your own.

White-label solutions offer a fast-track way to enter the market and establish your brand without the steep learning curve.

Shared challenges and key considerations

While both options simplify the process of selling products under your own brand, success still demands effort and strategy for optimal brand building. You’ll need to:

• Ensure your online storefront operates seamlessly and is well-promoted.
• Take time to research and partner with trustworthy private-label or white-label providers to ensure product quality.

No matter which route you choose, your dedication to building and maintaining your brand will be the ultimate driver of success.

Picking your business solution: white-label vs private-label

Now that you know the differences between private labeling and white labeling, along with the pros and cons of each, how do you choose one? If the idea of having someone else handle manufacturing and shipping for you sounds appealing, then either of these could be great options.

Overall, both options allow you to sell existing products with your own branding. The main difference is that private-label services usually only sell each product to one retailer while white labeling offers one product to several companies. Private labeling may also allow additional customization, but white labeling is often quicker and easier to get started with.

When it comes to white-label vs private-label, one isn't inherently better than the other. It's up to you to think about your business needs.

By considering all aspects of your business, you can better determine if white label or private label is better for you. Once you decide which route to take, focus on making your online shop as appealing as possible to reach your target market.